CHICAGO, IL — As Illinois continues to face a severe shortage of affordable housing, the Illinois Housing Council (IHC) is urging lawmakers to advance House Bill 4413 and Senate Bill 3738, sponsored by State Rep. Dagmara Avelar and State Senator Mike Porfirio, to both extend and expand the Illinois Affordable Housing Tax Credit (IAHTC)—a long-standing, bipartisan program that has helped create and preserve tens of thousands of affordable homes across the state.
Illinois currently faces a shortfall of nearly 300,000 affordable rental homes for its lowest-income residents. Rising construction costs, higher interest rates, and limited public resources have made it increasingly difficult to bring affordable housing developments to completion, even when federal funding is available.
For more than two decades, the IAHTC has helped bridge that gap by encouraging private donations of cash, land, and buildings to nonprofit affordable housing developers. In return, donors receive a state tax credit equal to 50 percent of the value of their donation, allowing affordable for-sale and rental housing developments to move forward that otherwise would not be financially feasible.
Since its creation, the IAHTC has leveraged more than $510 million in private donations to support affordable homeownership and rental housing in nearly every region of Illinois. Developments supported by the credit include new construction, rehabilitation, and preservation in urban, suburban, and rural communities alike.
“This program works because it turns private investment into real housing outcomes,” said Allison Clements, Executive Director of the Illinois Housing Council. “The IAHTC is not an abstract policy tool; it produces homes, stabilizes neighborhoods, and strengthens local economies.”
House Bill 4413 and Senate Bill 3738 would extend the IAHTC for another 10 years — providing the long-term certainty developers and donors need to plan and finance housing — and would also increase the program’s annual growth rate from 5 percent to 10 percent. That modest adjustment would significantly expand the program’s impact while keeping state costs low, allowing Illinois to unlock far more private capital for every public dollar invested.
If the IAHTC is allowed to expire at the end of 2026, developments currently in planning will stall, preservation efforts will slow, and Illinois’ housing shortage will worsen — especially in rural and small-market communities with fewer financing options.
The financial consequences are significant. An estimated $40 million in lost Donation Tax Credits would result in the loss of $80 million in private donations and transfer fees. Illinois would also lose the leverage the program provides—potentially another $15 million or more each year in private capital for affordable housing.
The Illinois Housing Council is calling on legislators to advance HB 4413/ SB 3738 and ensure Illinois extends and strengthens one of its most effective and responsible housing tools at a moment when affordability is at the center of the legislative agenda.
ABOUT IL HOUSING COUNCIL
The Illinois Housing Council (IHC) brings together industry leaders and policy makers to meet the fundamental need for affordable housing in Illinois, opening doors to greater opportunity for all residents. IHC’s membership includes over 270 private businesses and nonprofit organizations active in the development and preservation of affordable housing across Illinois – including developers, lenders, property managers, architects, general contractors, and service providers.